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Seems to me Netflix made the same mistake the content creators made, they got greedy. Netflix had a good thing going, but trying to charge 60% more for something you've been giving away for free was never a good idea. It would have been smarter to incrementally raise rates over the course of a few years.

I really can't understand how Netflix expects customers to pay more for streaming while they are actually losing content. Expand your catalog first, THEN increase rates.

This happens because the investors are more important than the customer. I fully understand that they needed to increase their prices to increase the content, they just needed to be honest and upfront with their customers.

I dropped them as soon as I got the email that they were raising my rates 60%. I will find my entertainment somewhere else.

The greed is coming from the investor as most of the companies today. I want my huge dividend now.

Good luck to Netflix IMHO they will not recover from this. They will be bought out by some other company before they lose everything.

You all should take a read through Engadget's thoughts on this. They have a number of interesting points, and a number of them I think I agree with.

The biggest one is that Netflix probably agrees with the title of this thread, Netflix as a disc-in-the-mail company is doomed. Before long (maybe already) it's going to be more expensive to deliver discs to us than to stream video. On top of that as bandwidth improves quality will as well. Heck Netflix HD is already pretty good, no not up to Blu-ray (and I'll be keeping my disc plan specifically to get BDs of new releases), but better than DVD and probably on par with Cable or Sat, which, like it or not, is good enough for most people. It will be interesting to see financial figures for the two companies going forward, it might be enlightening.

Actually I've seen this coming for a while. I noticed a while ago that stuff in my not-new-release queue was disappearing. It seemed a sure sign that they were slowly shutting down their DVD business. Today seems to be the follow-through on that, split off the disc business and let it fare how it will.

We tend to live in our own little world on this forum, but it's important to take a step back from time to time and look at the big picture. Netflix has about 4 times as many streaming-only customers as it has DVD-only customers. The future is streaming and video on demand, not discs, like it or not.

The future is streaming and video on demand, not discs, like it or not.

As long as there's a demand for discs I still see NetFlix/Qwikster supporting it. It may mean longer wait times due to fewer discs available, but to me it's worth the wait. If I get impatient there's always RedBox.

I can definitely see NetFlix shutting down many of it's distribution centers and reducing their inventory. NetFlix got it's start by renting discs so I don't see them abandoning that market anytime soon. They've already got the best market share in that category so it makes little sense to me that they'd bail out altogether, at least not for the immediate future. If they see DVD/Blu-Ray rentals start to shrink to where it's no longer profitable they'll bail in a heartbeat. It just makes perfect business sense to do so.

As long as there's a demand for discs I still see NetFlix/Qwikster supporting it. It may mean longer wait times due to fewer discs available, but to me it's worth the wait. If I get impatient there's always RedBox.

Yeah, but selection will dwindle.

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I can definitely see NetFlix shutting down many of it's distribution centers and reducing their inventory. NetFlix got it's start by renting discs so I don't see them abandoning that market anytime soon. They've already got the best market share in that category so it makes little sense to me that they'd bail out altogether, at least not for the immediate future. If they see DVD/Blu-Ray rentals start to shrink to where it's no longer profitable they'll bail in a heartbeat. It just makes perfect business sense to do so.

I don't really think they're going to purposefully kill it, but I do think they're just going to sort of "let it ride".

I dropped them as soon as I got the email that they were raising my rates 60%. I will find my entertainment somewhere else.

The greed is coming from the investor as most of the companies today. I want my huge dividend now.

Good luck to Netflix IMHO they will not recover from this. They will be bought out by some other company before they lose everything.

I dropped them also soon after hearing about the price increase. It was barely worth paying for their streaming service to begin with due to a lack of content. As others have said already, content is king.

Content providers won't be happy until netflix charges close to video-on-demand prices, which eliminates one of Netflix's few advantages - value.
I think they're doomed.

I don't know whether they are doomed; the market and consumers will make that decision. My issue with this company is they have managed to frustrate their customers with price increases and just when it was safe to go back in the water we get this news. It's hard to believe they could not make this switch transparent to the consumer. For a billion dollar business that says it cares about their customers, they surely must have a marketing dept that is run more like a mom and pop shop.

I agree that streaming is the future, but that future is a long way off. For the next 20 years or so, it's going to be 20 steps forward, and nineteen steps back. Even without competitors, I've always wondered how much Netflix could really profit from streaming because the studios always feel that that money should be theirs. The more popular it gets, the higher the license fees. The real problem is, if this becomes a bidding war, Netflix is flat broke compared to amazon, or anyone else in the game. I think amazon's system of prime unlimited plus pay to stream everything else holds promise. But, as netflix prices soar ( and they will), many will find that paying per item to watch works better for them.

I think Netflix sees the discontinuation of Saturday mail service and the ever increasing mailing costs as a couple more nails in the coffin of DVD mail service. The future is streaming with Amazon and Netflix making it a priority to new content. Right now streaming is really not an good alternative to renting because of the lack of new and good content.

The success of streaming really is in the hands of the owners of the content, as far as pricing get used to increases. I see eventually another level structure where you will pay for the newest content, and it will not be cheap like double the cost.

Hmmm..... maybe doomed was too strong of a word. I definately think Netflix will be in decline until they can nail down better content. I'm reminded of HD-DVD vs Blu-ray, and how Time Warner decided the winner.

I don't really think they're going to purposefully kill it, but I do think they're just going to sort of "let it ride".

I think this too.

Quickster was created to die. Simple as that.

Aside from the pure lazyness of not wanting to deal with getting out of the car and dink with the red Kiosks, my main beef with Redbox is the extremely limited title selection of just current movies. Last weekend we had movie night where we rewatched Aliens in the basement and this weekend I hope to do Black Hawk Down. Neither of these are possible with Redbox.

Perhaps on a related note though, I have had 3 broken discs out of the last four from Netflix (never had a broken/scratched disc in the years prior.) While that is not novel, the issue I have is that I reported the last one broken on Saturday morning and I still have not received notification that the next disc in my queue has shipped as of Tuesday morning. Let it ride may just be the best scenario we can hope for.

Consumers (me included) want On Demand access to virtually all new and old movies and TV shows in HD. They expect this service for basically the price of buying a DVD monthly.

The content creators however want..

1)you to first buy a DRMed film at a fairly hefty price whether digital or on disk, basically at the price consumers expect for a monthly subscription.

2) If they can't get you to buy they want you to rent via PPV at a fairly hefty price.

3) They want to be able to take a film off the rental market so they can sell an "exclusive" to HBO/Showtime/Starz or whoever for a certain window of time. The is double plus good for them because it may prompt some people to actually buy the film at this time.

4) They want to sell their really old content into syndication on some cable channel, or sell it to some streaming company like Netflix to continue to squeeze some money out of it.

Most companies like Apple, Amazon, Vudu, and the Cable Co.'s have gone along with this are are doing PPV and sales for popular content. Only Netflix and Hulu are bucking the trend.

For Netflix to be successful it needs to think of itself as HBO or Showtime (which charge a lot more than Netflix for a far smaller selection) and get into the bidding war for content during the period when a movie is in its "exclusive release window" phase.

We've all become accustomed to being able to rent new releases on disc because of laws around that. Netflix could profitibly do that with discs at a low price. The same laws do not apply to streaming so there's now way we are ever going to get that sort of selection via streaming at an all you can eat price. The studios just don't want it.

Ultimately people will either pay what the studios want one way or another or they'll rebel and torrent stuff. There's just no other way prices for streaming will really come down to what consumers have come to expect from the DVD rental model.

Before we all anoint streaming as the future, don't forget that ISPs are a third player in this battle. And as streaming gains more and more traction, who will be bearing the burden of all the bandwidth overhead? The ISPs, and they aren't just going to sit back and take it. The mobile carriers are already limiting bandwidth usage by throttling or charging extra past certain points. I can't see any way this doesn't also happen with non-mobile ISPs too. So while it may cost $XX/month for streaming through Netflix, how much will your monthly internet bill increase down the road to accommodate the bandwidth of widespread streaming of video content?

That is the thing that I think will doom Neflix, because it seems to me that those sitting prettiest in all this are the cable pay-per-view providers. They already seem to have a good working relationship with the studios as it seems they get every new release on pay-per-view and they are usually also ISPs. So they can certainly afford to discount bandwidth used to stream their content to their customers. Netflix however has no such luxury and might get hammered out if ISPs start doing tiered pricing based off data usage.

I doubt you will be ever be able to stream all new content at a flat rate. I could see a flat rate plan where get all that old crap and pricing options depending how many new movies and TV shows you want per month. And I can see this not even happening for awhile if ever because they make a ton off of a Pay Per View and the Cable/Satellite consumers. As far as disks go I think the media holders know it is a dying medium that will pretty small market in 5 years.

Before we all anoint streaming as the future, don't forget that ISPs are a third player in this battle. And as streaming gains more and more traction, who will be bearing the burden of all the bandwidth overhead? The ISPs, and they aren't just going to sit back and take it. The mobile carriers are already limiting bandwidth usage by throttling or charging extra past certain points. I can't see any way this doesn't also happen with non-mobile ISPs too. So while it may cost $XX/month for streaming through Netflix, how much will your monthly internet bill increase down the road to accommodate the bandwidth of widespread streaming of video content?

That is the thing that I think will doom Neflix, because it seems to me that those sitting prettiest in all this are the cable pay-per-view providers. They already seem to have a good working relationship with the studios as it seems they get every new release on pay-per-view and they are usually also ISPs. So they can certainly afford to discount bandwidth used to stream their content to their customers. Netflix however has no such luxury and might get hammered out if ISPs start doing tiered pricing based off data usage.

Ah this is not really true. ISPs have a cost per bit, magabit, gigabit.. whatever unit you choose that goes down almost hourly. If you pay attention to the capacity and cost of capital goods it is a lead pipe cinch it will eventually cost nearly nothing to transport an infinite amount of bits. The other costs, like maintenance and customer service are already built in the model. The problem is really that the ISP are now Content owners and think like content owners. They understand that in this economy their value proposition stinks and they want to own content so they can either add value or protect themselves from content cost increases. But the pipeline business has a tremendous cost of delivery prospectus going forward. The new router and switches from Cisco are simply mind boggling in their speed and capacity. When 8 port consumer grade gigabit switches are $25 you know where transport cost are going.

What I would like to see (and would be willing to pay quite a bit for) is a combination of Netflix and cable, whereby we pay a flat rate (say, $100/mo) and get unlimited streaming access to movies at release and TV as soon as it becomes live. No more "channels" that are constantly airing, but on-demand access to the content. I know, it's a pipe dream, and will never happen with the current content and provider system that we have, but many of us already time-shift, so why not take that to the next level?

f you pay attention to the capacity and cost of capital goods it is a lead pipe cinch it will eventually cost nearly nothing to transport an infinite amount of bits.

The problem is - until that utopia arrives - I've to deal with 250G a month bandwidth. That will quickly disappear if I can stream some BD quality movies.

This netflix changeover is bad for people like us who rent - and care about PQ. Quikster will be on the chopping block in no time - but hopefully someone picks it up who are interested in this business and add on 3D BDs and improve the service - even if that means higher monthly price.

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I dropped My 3 at a time disc service a few months ago. Changed to Blockbuster. They are much slower but I have a local store to swap my titles with.

Netflix was not shipping any newer titles to me anymore (Customer since 2004). Their policy to give priority to new customers is a bit disappointing.

The biggest thing for me with their streaming is content and QUALITY. I currently only use it for casual viewing, generally in the background while doing other things. Its also good for my 5 yr old daughter.

On my PJ most titles in HD (xbox Live) are very soft, similar to upscaled DVD maybe a touch better and the audio only 2 channel. Great for bedroom and kitchen viewing...

I have also noticed a current trend of bandwidth problems especially in the evenings. I have Comcast business class 50/10 circuit. I am constantly downgraded to SD which is annoying but only watch on a 32 and 40 inch TV.

To be competitive Netflix needs access to premium content and the streaming quality MUST be much closer to BD. I would pay more money even if it was a premium per title on the newest content, but the quality has to be there.

Well, not quite. Don`t forget that we are almost 10 years into the mp3 iTunes/Amazon era (which is the present for the average user), and you can basically find CDs (which get ripped to FLAC in our case) for basically any genre of music that exists, heck, i have a hard time not finding music released on CDs these days. For classical and jazz and some rock bands, you can also find SACDs, DVDAudio and some Blu Ray concerts.

One big issue with subscription streaming is that the content providers are totally against it. They want and are forcing everyone to a pay per view plan. That is the biggest problem facing Netflix. The same thing is happening to Amazon subscription streaming service.

So for the time being anyone that is using a subscription streaming business model will have very limited content. The streamers that have pay per view type pricing have all of the content that they want.

As a secondary note, I wonder how much pressure the cable/dish companies are placing on the content providers to restrict subscription streamers?

Netflix increasing their price from $11.95 to what $19.95? for one disc at a time and streaming is going to kill them. I have Amazon Prime and from what I've seen they offer the exact same stuff. I prefer Netflix's GUI in MC but it's not worth $20 a month over Amazon.

So for the time being anyone that is using a subscription streaming business model will have very limited content. The streamers that have pay per view type pricing have all of the content that they want.

True. But they also have an issue of getting people to pay such large amounts to stream the content. As much as the content industry likes the Vudu model at first blush, time will tell if it makes them the most profit.

$6 to watch a show streamed from Vudu is a non-starter for me. The studios get a lot more of my money with Netflix's business structure than Vudu's.

I dropped My 3 at a time disc service a few months ago. Changed to Blockbuster. They are much slower but I have a local store to swap my titles with.

Netflix was not shipping any newer titles to me anymore (Customer since 2004). Their policy to give priority to new customers is a bit disappointing.

The biggest thing for me with their streaming is content and QUALITY. I currently only use it for casual viewing, generally in the background while doing other things. Its also good for my 5 yr old daughter.

On my PJ most titles in HD (xbox Live) are very soft, similar to upscaled DVD maybe a touch better and the audio only 2 channel. Great for bedroom and kitchen viewing...

I have also noticed a current trend of bandwidth problems especially in the evenings. I have Comcast business class 50/10 circuit. I am constantly downgraded to SD which is annoying but only watch on a 32 and 40 inch TV.

To be competitive Netflix needs access to premium content and the streaming quality MUST be much closer to BD. I would pay more money even if it was a premium per title on the newest content, but the quality has to be there.

I too have been using blockbuster 3 at a time, almost since they started i dont use any streaming due to the pq i rent mostly blu ray and streaming just doesnt have the pq yet, unlike you i get movies from blockbuster in about a day and most always get the new releases, one of the best things i like is when im done with my 3 movies i go to the store and pick out 3 more movies with no additional cost, has anybody tried blockbuster yet they seemed to improve over the years

I too have been using blockbuster 3 at a time, almost since they started i dont use any streaming due to the pq i rent mostly blu ray and streaming just doesnt have the pq yet, unlike you i get movies from blockbuster in about a day and most always get the new releases, one of the best things i like is when im done with my 3 movies i go to the store and pick out 3 more movies with no additional cost, has anybody tried blockbuster yet they seemed to improve over the years

I think Blockbuster will demolish Quickster for exactly that reason. You can conveniently pick up movies any time you want as long as there is a store nearby - especially on weekends - which is when most people want to watch them anyway.

I do think streaming is the future however. Netflix was smart to recognize it and to develop an effective exit strategy for the mail order business. The split will cut their revenue significantly to start with, but I think they will hold on to the #1 position as long as they are able to deliver new release content along with 1080p / digital surround streams to the masses. There are enough streaming device out there now to make this possible.

Ah this is not really true. ISPs have a cost per bit, magabit, gigabit.. whatever unit you choose that goes down almost hourly. If you pay attention to the capacity and cost of capital goods it is a lead pipe cinch it will eventually cost nearly nothing to transport an infinite amount of bits. The other costs, like maintenance and customer service are already built in the model. The problem is really that the ISP are now Content owners and think like content owners. They understand that in this economy their value proposition stinks and they want to own content so they can either add value or protect themselves from content cost increases. But the pipeline business has a tremendous cost of delivery prospectus going forward. The new router and switches from Cisco are simply mind boggling in their speed and capacity. When 8 port consumer grade gigabit switches are $25 you know where transport cost are going.

Exactly, I don't think the bandwidth caps are sustainable. Or at least not the current caps. Sooner (or later) people are going to really start screaming about that. Netflix has stated that already, an extra GB of data only costs them $0.01.

As more and more people start consuming more and more bandwidth, and running into bandwidth caps, something is going to have to change. I suspect what will happen is as larger and larger portion of their customer base start running into bandwidth caps (and not just the "extreme" users), the caps are going to have to go up.

I mean just think of a situation with a 250GB cap and 25GB streaming movies common, before long half of your customers are going to have blown their cap in no time. Sooner or later somebody is going to "blink" and either up their cap, remove it, or advertise that they don't have one, and the arms race will be on again, for the ISP that will allow the most data through in a month.

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Originally Posted by jeffkro

I guess I'm the only one to use redbox exclusively. You can't beat $1 rentals especially since there are probably only about 10 movies worth watching a year.

Except the selection is horrible. Even new releases, unless you're happy with DVD.

Quote:

Originally Posted by GreenEyez

Well, not quite. Don`t forget that we are almost 10 years into the mp3 iTunes/Amazon era (which is the present for the average user), and you can basically find CDs (which get ripped to FLAC in our case) for basically any genre of music that exists, heck, i have a hard time not finding music released on CDs these days. For classical and jazz and some rock bands, you can also find SACDs, DVDAudio and some Blu Ray concerts.

Yeah, but nobody "rents" them, that's what I mean. My point was Qwikster will continue on, but their selection will dwindle. I've seen this in my own queues for the past year or two, more and more stuff just going permanently unavailable or very long wait (and never shipping). It seems that lots of older, less common stuff, when the discs die, they just don't bother replacing them anymore. I expect this to continue for Qwikster.

Quote:

Originally Posted by DougSmith

I think Blockbuster will demolish Quickster for exactly that reason. You can conveniently pick up movies any time you want as long as there is a store nearby - especially on weekends - which is when most people want to watch them anyway.

But that logic would mean Blockbuster should have demolished Netflix. As pessimistic as we are about Qwikster, there's no official word of any service or policy changes. If nothing changes, why would BB suddenly demolish a service formerly known as Netflix.

For some of us I viewed it like the government raising my taxes and not providing anything for the extra cash. Oh that happens all the time. I believe the plan should have been going to the investors with the idea get some capital to increase content then let the customers that are keeping you in business that there will be an increase in the price to provide an ever increasing amount of content and quality. The original email that I received about the price increase made it sound like a great deal that I only needed to pay $7.99 for each service. Just not the right way to go about it.

Depends on whether they actually sign big talent for their streaming services. It is quite obvious that netflix is saving as much as possible to sign deals in the future. So, what is the content that they will be buying? If they sign multiple big-name deals, I suspect many will come back as time goes on.

If Netflix doesn't sign any significant deal in the near future, I suspect they will in fact be digging their own grave

But that logic would mean Blockbuster should have demolished Netflix. As pessimistic as we are about Qwikster, there's no official word of any service or policy changes. If nothing changes, why would BB suddenly demolish a service formerly known as Netflix.

Well, I suppose they should have. Netflix's success was, in part due to their low infrastructure costs and low cost mail delivery service. The balance now seems to be shifting back to favor a more distributed delivery model. But I guess we'll see.

Every time Netflix has raised prices in the past 2 years I have reduced my service level to compensate - and I just did it again. Right now I'm willing to spend a max of ~20 bucks on movie access per month. I'll keep the Netfilx and 1x Qwikster services for now, but BB is beginning to look attractive as an alternative for Bluray access because I can drop by the local store anytime I stop at the supermarket. Honestly, I forget to pack up the movies and drop them in the mail half of the time, so I have really only been getting about 2 movies a week for my "unlimited 2 at a time" service.

Nearly all of the music I listen to now is streamed over the internet, and I will never go back to hassling with physical CDs. The way things are going I think the same will become true of movies in just a couple more years.

A lot of people here seem to be hung on the idea of Netflix getting better content. At the rate they've paid to re-up the last few contracts, my guess is that within three years, they could be pushing 13-14 dollars per month just to keep the content they have now. Add in new license fees for content that's in any way impressive, and you end up at a price that most just won't be able to justify. Unless they change their model to a tiered or PPV system, I just don't think there exists a happy balance between cost and content. And Hollywood doesn't like the all you can eat model, so don't think that they can be reasoned with on fees. Netflix just doesn't have the cash to pull in great content without raising rates.